It was founded on 3 June 1995 by the former Secretary of State of Azerbaijan Lala Shevket on the Constituent Conference held in the town of Barda in the unoccupied part of Qarabagh region of Azerbaijan.

ALP declares its main purpose to be the construction of a legal state with socially orientated liberal economy, parliamentary democracy and with the clear division of powers between the branches of government, guaranteeing equality of everyone before the law.

The founder (and leader) of the Liberal Party of Azerbaijan is the doctor of medicine and philosophy, professor Lala Shevket.

In June 2003, she has resigned from her position prior to the Presidential elections, though the members of the Liberal Party still consider her their spiritual and moral leader, the position being confirmed by the ALP III Congress on 7 June 2003.

At the 2000/2001 election (November 5, 2000 and January 7, 2001), the party won 1.3% of the popular vote and zero out of 125 seats, according to the official results of the Central Election Commission.